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The humble moped goes from strength to strength

In 1975, when T S Srinivasan, the chairman of TVS Motors, decided to manufacture mopeds, few in India considered the low-profile two-wheeler the right choice for personal mobility. For several years after its launch, the annual production of mopeds was only around 30,000, prompting many to doubt the wisdom of going for a licensed capacity of 60,000 mopeds per annum. It was considered over-ambitious.

However, history has proved Srinivasan, son of TVS Group's founder T V Sundaram Iyengar, to be right. Cumulative sales of moped under the brand TVS XL reached 10 million early this month.

The company has introduced a special edition of its TVS XL Super to celebrate the occasion. The new variant will come in Silver Grey and Titanium and carry a unique sticker to mark the 10-million milestone.

Over the years, many players tried to break into the moped segment, but TVS Motors alone has been tenacious. Bharat Gianani, auto analyst at Angel Broking, says low margins and a stagnant market share of 4-5 per cent in the two-wheeler market have kept other players away. However TVS Motors, which has a monopoly in the segment, has managed to thrive because its manufacturing lines have been ammortised, which gives it pricing power that new entrants cannot hope to match.

Since the first moped rolled out from the company's Hosur plant in Tamil Nadu in 1980, TVS Motors has regarded the bike as its lucky charm. In advertising campaigns, the moped is referred to as "raasiana vandi" or lucky vehicle. Experts says the vehicle is successful not only because it can carry two people, but also because of its utility as a load carrier in rural areas. It is because of this functional purpose that sales have remained steady, even though the company has not launched a new product in many years now.

Moped sales grew 3.6 per cent in 2014-15 to 759,000 units from 733,000 units in 2013-14. This growth came after a 8 per cent drop in sales the previous year. "The moped's sought-after status for personal mobility in rural areas is because of its load-carrying and haulage abilities," says K N Radhakrishnan, president and CEO, TVS Motor.

While TVS Motors's traditional stronghold has been the states of Tamil Nadu, Andhra Pradesh and Karnataka, the moped's appeal extends across the country. According to automobile magazine Overdrive, when a drought-like situation in Tamil Nadu caused a fall in demand for mopeds recently, increase in demand from states in northern India kept the sales ticking. TVS Motor's recent efforts to step up its marketing and advertising efforts in northern India also helped in reducing the drop in sales in Tamil Nadu to a minor blip.

In 2014-15, mopeds fetched TVS Motors turnover of Rs 1,553.20 crore, against Rs 1,470.23 crore in 2013-14. Mopeds may have a key role in boosting TVS Motors's position in the two-wheeler space.